Factory activity across Europe and Asia showed signs of resilience and remained firm last month, driven partly by the global AI spending boom, even as the energy price shock from the Iran war kept inflation elevated, surveys showed on Thursday. Rising inflation pressures across the globe have pushed several central banks, including the Federal Reserve (Fed) and European Central Bank (ECB) to start hiking interest rates with more increases expected. This has contributed to a sharp sell-off in bond markets, pushing up borrowing costs for firms already hit by increased production costs. However, surveys show that, for now, many factories are reaping the benefit of a surge in demand for their products.
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